This is a guest post by the fabulous Jennifer Heymont.
The muttering has been going on for years. With every price increase, the rumbling was louder. In 2015, when news that tiered pricing might be coming to Disney World, it got louder still. Blog posts (like this one from Frommers) and newspaper articles (such as this one in the Washington Post) led with references to $115 steaks and $50 a plate dessert parties, claiming that a Disney World vacation was now only affordable for the top 10% — and worse, that this was a conscious decision on the part of Disney management to aim at that target market. People posted their indignation on Disney forums, expressing their outrage that Walt’s dream of a place that all could enjoy was being so casually ignored. In the spirit of Touring Plans, let’s take a data-driven look at some of the assumptions that underlie all this indignation:
- Disney is outrageously priced for what it is selling.
- Disney World has recently become inaccessible to the poor and the middle class.
- The Disney World of today does not fulfill “Walt’s Dream”.
Assumption 1: Disney is outrageously priced for what it is selling
Although this sentiment is as commonly associated with an entire Disney vacation as it is with just the ticket prices, I’m going to limit myself to the tickets for this analysis. Here’s my reasoning: aspects of a Disney vacation such as transportation, lodging and food costs are as highly variable as any other vacation, with many adjustments that can be made to suit the desired budget and vacation experience. However, if we consider that the focus of a Disney World vacation is to spend time in the parks, then the cost of getting through the tapstiles is inescapable.
The price Disney is charging for a day in the parks is only excessive if it is significantly more than the price of a comparable product. Since the per-day price of Disney’s tickets varies depending on how many days you buy, there is a bit of a problem deciding what the price you’re going to compare actually is, especially since many of the competitor tickets also have a sliding scale. I’ll use two methods to compare the prices. The first approach is to use the number of days necessary to visit each park in a complex once – for a standalone park that would be one day, for Disney World that would be four days – and use the ticket price associated with that number of days. Using the website prices available for adult tickets for a sampling of amusement and theme park attractions we get the following table.
|Park||Price||# Days||Price per day||Ticket Type|
|Florida Legoland||$94||1||$94||1-day, 7-day advance purchase|
|Universal||$170||2||$85||2-day 1 park ticket|
|WDW||$324||4||$81||4-day Magic Your Way base ticket|
|Busch Gardens Tampa||$80||1||$80||1-day|
|Busch Gardens Williamsburg||$77||1||$77||1-day|
|Six Flags New England||$62||1||$62||1-day|
|Water Country New England||
WDW falls third on this list, but less than $10 separates spots 2-5. By this measure, it seems reasonable to say that Disney World’s tickets are priced comparably to its competitors.
A second method looks at the break-even price per day for a season pass or extended multi-day ticket. The cost of a single-day ticket to Six Flags is $62, a season pass is $92. Therefore anyone planning to go for two or more days on a single vacation should buy a season pass, even if they will only be in the area for a week and won’t use it for the rest of the year.
This price is useful because it is the best reflection of the market tolerance for an extended visit. The majority of people vacationing near Six Flags New England [who like amusement parks and chose that area with Six Flags as part of the draw] will consider the one-day ticket price to be well spent. They probably wouldn’t pay the same price for a second day, but a significant number will return for a discount. Pretty much nobody would come back for a third day at any cost above free, and might not even come back then. Put differently, you could vacation for a week near Six Flags New England, buy a season pass, and go for 7 days for a significantly lower per-day ticket cost than 7 days of Disney World admissions. However, the fact that a season pass becomes the best price option on the second day that you visit shows that not that many people think it’s appealing to go to Six Flags every day for a week.
Looking at the number of days to break even on a multi-day ticket or season pass, we can think of this as the amount of time that is required to fully experience an attraction. After visiting for this number of days, vacationers may choose to hang by the pool and do nothing, or they may choose to go to another attraction and pay for it, but they are not likely to go back to the attraction that is now “free”. Conversely, when making vacation plans this represents a number of days that people who are cost-conscious would allow to spend at the attraction. They would milk a single attraction until the entertainment value bottoms out, rather than paying more per day to experience a wider variety of attractions. If we use this number of days and the price of the multi-day ticket to generate the average price per day, this figure represents the daily price for the minimum amount of acceptable entertainment value from an attraction. Let’s call that the Bottom Out price, the cost of a day when the entertainment value per day has reached its minimum. This Bottom Out price can be used to compare ticket prices that have a sliding adjustment across a range of attraction sizes, as shown in the following table.
|Park||Price of Ticket||# Days that justifies value||Bottom Out price||Bottom-Out Ticket Type|
|Busch Gardens Tampa||$139||2||$70||14-day unlimited, includes additional parks|
|Sesame Place||$113||2||$57||Season Pass|
|WDW||$749||14||$54||Platinum Annual Pass|
|WDW||$370||7||$53||7-day Magic Your Way base ticket|
|Florida Legoland||$99||2||$50||Season Pass|
|Six Flags New England||$92||2||$46||Season Pass|
|Busch Gardens Williamsburg||$87||2||$44||7-day unlimited, includes second park|
|WDW||$400||10||$40||10-day Magic Your Way base ticket|
|Hershey Park||$160||4||$40||Season Pass|
|Hershey Park||$112||3||$37||3-day pass|
|Water Country New England||$66||2||$33||Season Pass|
WDW appears three times on this list. The 7-day ticket is listed because many families are limited to a week’s vacation, and even if another ticket is more cost effective that option is not available to them, so it’s important to recognize that price. The 10-day ticket is listed because the per-day price for 11, 12, or 13 days’ worth of tickets is higher than the 10-day ticket, and so families on a two-week vacation are likely to choose this ticket and simply take some rest days. The fact that Disney’s breakeven for the Annual Pass is around 14 days is an incredible outlier, and is a reflection of the large amount of time it takes to cover any significant portion of the parks. I think it’s fairly reasonable to conclude from these numbers that the Bottom Out price for Disney World is quite comparable to that of its competitors and in the case of a 10-day ticket it is even a notable value.
Overall conclusion: this assumption is false. By either measure used, if you can afford the cost of the ticket in the first place then Disney tickets are reasonably priced in comparison to entertainment value received for similar offerings.
Assumption 2: Disney World has recently become inaccessible to the poor and the middle class
Personally, I think it’s a myth that Disney was accessible to the poor in recent history. We’d like to show that with data though, so let’s take a look. When reviewing historical ticket prices, we immediately encounter a stumbling block: the changes in Disney’s pricing that occurred in the early 1980s. Prior to 1983 the ticket structure included a base admission to the park and ticket books that covered rides on higher value attractions. It wasn’t free to ride Space Mountain once you got in the park. I’m far from convinced that Disney World was accessible to the poor prior to 1983, but even if it was then they were certainly not having the same Disney World experience as the middle class or the affluent. To look at this question, I’m going to start with ticket prices in 1984 so that the actual experience received for a ticket is consistent. I’m also going to exclude the one-day ticket; since we’re considering ticket prices in the context of a Disney vacation it’s reasonable to assume that vacationers intend to spend at least one day in each park.
Given those parameters, we’ll look at prices for the following brackets of tickets purchased by some fictional families:
- The Entry Level (EL) ticket price. This ticket represents the number of days of admission required to visit each park for one day, and would be purchased by a vacationing family that is able to afford to come to Disney World, but had made a real stretch to do it and may never return.
- The Comfortable Family (CF) ticket price. This ticket represents the number of days that would be purchased by a family that could comfortably afford a vacation to Disney World, but not so comfortably that they wouldn’t be cost-conscious when buying the tickets.
- The “we can go All Out” family (AO) ticket prices. This ticket represents the number of days that would be purchased by a family that wants to make sure they don’t miss anything, and can well afford to buy the ticket necessary to support that goal. This is the family that may go to the parks almost every day of their vacation, even if just for dinner or to catch the fireworks. This family might make WDW a routine vacation destination and may likely spend more than a week, but we’ll assume they do not go more than once per year.
Obviously, the descriptors are not exact and there may be lots of exceptions based on individual preference. Nonetheless, this gives us some idealized demographics and ticket classes to hang our analysis hats on. Since the number of days and type of ticket are going to vary for each class depending on the year, I’ll use the average price per day for the ticket, and I’ll sample in three-year intervals for simplicity. I also need to adjust for inflation, and in fact looking at the effects of inflation is the very first thing I’m going to do. If ticket prices have really only increased with inflation over time (hint: they didn’t), then a change in the availability of Disney tickets to certain demographics wouldn’t be Disney’s fault as they’d be just keeping up with the times (hint: they’re not). Let’s start by looking at the amount of increase in an individual year that’s due to inflation. We don’t really care about the total amount of the increase, just about comparing the amount that tracks with inflation to the rest of the increase. Therefore the data has been normalized to 100% in this chart.
We can immediately see that something big happened between 1984 and 1987 across all ticket classes, because the blue segment that represents the portion of the increase that comes from Disney’s management decision is huge across each category. That something was a 55% increase in the Entry Level ticket price, and an even higher increase of 83% in the Comfortable Family class. To give an idea of the magnitude of this three-year jump, it is another 12 years until 1999 to see these same percentage increases over the 1987 price. If the poor were able to afford the tickets prior to 1983, and if Disney tried to keep the same level of accessibility in some tickets when they switched to the single entry fee in 1983 – and those are big ifs – then I feel confident in saying that by 1987 Disney was no longer concerned with keeping this demographic in their business model.
The introduction of Magic Your Way tickets in 2005 also makes an impressive splash. In each category, the per-day price of the ticket goes down compared to the previous year’s price. Remember that 2005 is in the period immediately after the Early 2000s Recession, when the economy was still recovering, and it’s easy to see how Disney had an incentive to make tickets more affordable.
Overall, we can see that the tickets almost always increase in price faster than inflation, but the pattern is not the same between the different classes. The Entry Level ticket increases at the same rate compared to inflation through most of the 90s, but for the Comfortable Family the WDW component of the ticket increase is going up relative to inflation every year in this period. We don’t really know what Disney’s rationale is when they set these prices, but this difference suggests that there might be some consideration of what the target demographic can bear during this period. In the early 2000s and continuing into the Magic Your Way era, this distinction is lost and the price of the EL and CF tickets is generally an increasing multiplier of inflation. Since these demographics are presumably the lowest income and therefore are the least able to tolerate increases that outpace inflation, it’s a reasonable interpretation that Disney has decreased the importance of these segments in their target market.
Another way to look at the ticket increase over time is to calculate the projected value of the 1984 ticket based on inflation and compare that to the actual ticket increase.
The reason this chart is interesting is that it clearly shows the targeting of MYW to the Comfortable Family and All Out demographics. The Entry Level ticket goes down in 2005, but it doesn’t take anywhere near the dip that the other classes do and by 2008 it’s already exceeded the cost from 2002 before MYW was introduced. By contrast, the per day cost of the tickets for the Comfortable Family and All Out brackets hasn’t returned to the 2002 benchmark as of 2014. Part of this is that both of these brackets are getting more days on the assigned ticket than they were prior to MYW, but even if you hold the number of days the same then the total cost still takes until beyond 2011 to recover to pre-MYW levels.
One thing I haven’t discussed is how the defined ticket purchase brackets used above correspond to the terms “middle class”, “second quintile of income”, “10-percenters”, etc. That’s because so many of these terms don’t describe what we’re really interested in: the buying power or lifestyle associated with the individuals who make up Disney’s target market. Some people say middle class and they mean a family that makes the median income +/- a certain range. Some people say middle class and they mean a family that is able to eat out at least once or twice a month and take a vacation every year. Unfortunately, these two definitions may not correlate well over time, or even over different periods of an individual’s life. As an example, consider a young couple with two kids in the 2nd quintile of income. Housing costs of 25-35% are a common benchmark, so if this couple has inherited a house that is free and clear from a relative, they will have considerably more discretionary income than a similar family that is paying a mortgage. Certainly the discretionary income of my own family would be significantly higher if we didn’t have three children, although it wouldn’t be nearly as much fun to go to Disney without them.
When people say that Disney is pricing out the middle class, what they are really expressing is the following sentiment: “My uncle was a plumber and his wife stayed at home to raise their two kids, and when he was in his thirties and the kids were young they could afford to go to Disney World every year. But my best friend’s husband is a plumber and she stays at home to raise their two kids, and they’re in their thirties and they’re trying to figure out how they can possibly save enough money to get to Disney World before the kids are teenagers.” There are two variables in play here: we have already seen that with the rate of increase in ticket prices then if the two families have the same percentage of their income as discretionary funds the contemporary plumber’s family will have to spend a much higher fraction of that of available cash to get the same tickets. The second variable is how much of the contemporary plumber’s income is actually discretionary.
It’s common to see inflation-adjusted charts of median income over time, but for a variety of reasons those aren’t very informative towards this question. With only the income figure to look at there’s nothing to indicate how that amount actually stacks up in terms of discretionary income. Also, the most common method of adjusting for inflation using the CPI might not be the best measure to capture changes in buying power; even if the price of goods stays the same, the average basic needs of families change over time. It’s for certain that nobody was expected to buy or lease a laptop for school when I went to high school, nor did the set of standard monthly utilities to be paid include a bill for mobile phones. The Measuring Worth website offers a calculator for comparing the economic status of two incomes over time with respect to buying power. The following chart shows the ratio of the actual quintile incomes from 1984 through 2014 to the projected income needed to maintain the same economic status over time as the starting income in 1984.
(Quintile income information from the US Census Bureau, Table H-1 All Races.)
The trend is pretty clear. Taking just a single point to make a statement, in 2014 the actual income of a family at the top of the third quintile is just 78% of the income needed to maintain the same economic status as an equivalent family in 1984. Compared to the plumber uncle, the contemporary plumber’s family has 22% less real income. It is not hard to imagine that 22% comprises the bulk of the discretionary income for this family, if not all of it.
It has been suggested that one of the drivers for this decrease in real income and buying power of the majority of the population of America is a change beginning in the 1980s from a stakeholder model of capitalism, which considered the benefit of all stakeholders in a company when distributing profits including employees at every level, to a shareholder model of capitalism which only prioritizes returning the maximum possible amount to shareholders. Others have noted that perhaps we should not blame Disney for abandoning the lower quintiles as a target market when the majority of that economic segment can no longer give Disney the market share it once supported. There is some merit to this position, but I do think Disney is clearly practicing shareholder capitalism. Even if this business model is not the cause of the oversized increases in ticket price, Cast Member salary has been a contentious issue, as have incidents where Disney replaced local workers with contractors working in the US on H1-B visas.
Overall conclusion: The sentiment expressed here is true, although there are issues with the use of the word recently in the initial statement and a failure to clarify what is meant by middle class. The data support a statement that Disney has not been accessible to the poor for at least the last 30 years – since 1987, if it ever was. Trends in Disney’s ticket price increases indicate that Disney has reduced its focus on the market currently representing middle-income America. However, these are not recent trends and are visible for at least a decade since the Magic Your Way ticket structure was introduced – and possibly even before that. The issue is complicated by the observation that middle income America no longer has access to the discretionary income that it once enjoyed and might not be able to afford the costs of Disney even if Disney’s prices were simply tracking inflation.
Assumption 3: The Disney World of today does not fulfill “Walt’s Dream”
I’ll admit, it was kind of depressing writing the second section above. We love Disney, and while I don’t suggest the use of blinders nobody likes to look at the feet of clay, so to speak. So what does Disney do right? There are definitely quite a few things on this list.
♦ Fastpass+ is included with every ticket. If you have scraped and saved for five years to bring your family to Disney for your one and only visit, your child will not have to watch people stream past in the fast lane at every ride while they have to wait in the slow lane every single time and never get a turn to skip the line. And you will not have to explain to them that it is because those people have more money than your family. Your relatively low economic status may be inescapable in many situations outside of the park, but you will not have your nose rubbed in it in the ride lines.
♦ Disney allows food and drink to be brought into the parks. There are many strategies to control the non-ticket costs of a Disney vacation, and one of those big non-ticket costs is food. Many amusement or theme parks do not allow guests to bring in outside food, forcing a choice between purchasing overpriced food inside the park or spending valuable time leaving the park to eat and come back. At Disney you do not have to make this choice. Our own Steve and his family even brought an entire Thanksgiving dinner into the Magic Kingdom.
♦ Speaking of food, the Disney Dining Plan is a do-right in my book. Although it is often criticized for not necessarily offering savings, use of the plan can add non-monetary value to your vacation. Assuming you can cover the up-front cost or have received it as part of a promotion, the Dining Plan can silence the cash register that starts ringing in your head every time you get into a Quick Service line. This can backfire if you are one of those people who has to make sure you maximize the value you get, but if you’re just looking for the freedom of not having to give your kids a price limit when they choose their meals and snacks, the stress-free ordering on the DDP can provide a nice change from your vacation norm at other destinations.
♦ Last item on the food front, Disney’s handling of allergies and dietary restrictions is generally regarded as being exceptional. Families that have children or adults with one or more severe food allergies often have difficulty eating out in restaurants and may tend to avoid it altogether. Disney World provides a place where this normal experience is available to these families.
♦ Another popular cost-cutting strategy is to stay off-site. Once you are in the park during regular hours, nobody knows if you are staying on-site or off-site. Although Disney offers some extras to visitors who choose to stay at a Disney World hotel, none of them apply directly to your experience inside the park. There is no letter branded on your forehead marking you as an off-site guest.
♦ Once you’ve paid to stay on property, you can ride the bus no matter how much your room cost. The amenities of your resort may be different depending on how much you shelled out, but the extras associated with staying on Disney property such as Magical Express, bus transportation, and Extra Magic Hours are all available whether you are paying for a room at Pop Century or a suite at the Grand Floridian.
♦ Accessibility of rides: I’ve saved this one for last because it is very important to me. My teenage daughter is a thrill ride junkie; last summer she rode the Rock ‘n’ Roller Coaster five times in a row and would have kept going if she hadn’t burned through everyone’s fastpasses. My youngest is right there with her for at least the first couple of rides. My middle child, however, gets horribly motion sick – when he was younger he complained that he got Safari-sick on a particularly bumpy turn on the Kilimanjaro Safaris. Roller coasters and g-force manipulators are not his thing at all. In the world of amusement parks, Disney is relatively unique in offering a very high percentage of rides and other attractions that are a fun experience for him. These rides not only serve those with motion sickness issues, but also those with any disability or issue (including pregnancy) that would prevent them from riding the high-speed or high g-force rides found as the majority of attractions in other parks. Walt’s Dream is often expressed as being the desire to build an amusement park where the whole family could have fun together, in contrast to other parks of the time. Today, Disney World is a place where my whole family can have fun together in a way that is not possible in a Six Flags or a Busch Gardens. We keep coming back to Disney because everyone in the family has a good time, every time, and you can’t ask for much more than that in a vacation destination.
Overall Conclusion: This statement is false. Although any component of Walt’s Dream that relates to affordability has long fallen by the wayside, Disney makes an effort not to distinguish between demographics once the ticket is purchased and the room is paid for. Additionally, the type of rides and Disney’s approach to guest accommodation around food issues and disabilities make Disney World a place where the whole family can enjoy the same activities in a way that may not be possible in other amusement parks.
If you would like to make your own conclusions, here is a link to download the author’s original spreadsheet. Enjoy!